Should Value Investors Buy Green Dot (GDOT) Stock?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Green Dot (GDOT) is a stock many investors are watching right now. GDOT is currently sporting a Zacks Rank #1 (Strong Buy) and an A for Value. The stock is trading with a P/E ratio of 8.16, which compares to its industry's average of 23.71. Over the past 52 weeks, GDOT's Forward P/E has been as high as 9.32 and as low as 4.21, with a median of 6.67.

Finally, investors should note that GDOT has a P/CF ratio of 7.87. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 18.70. Over the past 52 weeks, GDOT's P/CF has been as high as 25.01 and as low as 4.91, with a median of 10.48.

Value investors will likely look at more than just these metrics, but the above data helps show that Green Dot is likely undervalued currently. And when considering the strength of its earnings outlook, GDOT sticks out as one of the market's strongest value stocks.

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This article originally published on Zacks Investment Research (zacks.com).

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